As we come out of the pandemic crisis, we see a number of attractive long-term structural growth trends emerging. Some of these trends have been accelerated by the pandemic, while others have emerged as a result of policy initiatives to tackle the crisis. Finally some of these are related to the changing dynamics in a world that has been significantly disrupted.
From these structural growth trends, we foresee a number of medium-term opportunities for investors in the post-pandemic world. These were highlighted in our ‘2021 Investment Outlook’ released earlier this year. In this series we outline the key points of each opportunity and how they are captured in our thematic mega-trend framework. Then our investment team’s sector specialists provide a breakdown of the opportunities across the sectors where we focus our research efforts.
Medium-term opportunities
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Technology
Deeper integration into every sector of the economy and likely acceleration of existing trends.
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Financial technology and Financials
Acceleration in migration towards online channels, seismic disruptions and nascent trends emerging.
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Industrial Technology and Industrials
Opportunity for increased efficiencies through robotics & automation, new energy and green infrastructure.
The opportunities that we foresee post-pandemic are captured in our three long-term mega-trends analytical framework, which are
- Resource Scarcity,
- Demographic Change, and
- Future of Technology.
We are able to analyse every company we research in terms of exposure to those mega-trends and the themes within them. As a result, we are able to assess, at the portfolio aggregate level, the extent of our exposures to the various themes within the mega-trends shown in the image below. This analytical framework enables us to
- assess our thematic exposures more accurately,
- manage risk exposures and portfolio diversification more efficiently, and
- direct our research efforts where we see attractive long-term structural growth opportunities.
We list below the medium-term opportunities that we foresee in a post pandemic world, which our sector specialists will expand on.
- increased infrastructure spend to boost the economy, notably railway and 5G infrastructure;
- increased spend in healthcare infrastructure to both make the public healthcare sector more prepared for future pandemics, and to increase investments in homecare and telemedicine;
- increased incentives in sustainability, whether it is social sustainability or greener solutions in transport, energy generation, infrastructure and construction in particular;
- increased investment in cloud computing and cybersecurity given the acceleration in the pace of migration to digital economies;
- increased investment in robotics and automation as corporates tackle the need to make their supply chains more robust; and
- improvements in food hygiene and general hygiene (both household and professional premises).
In our view, all of these opportunities present higher structural growth potential overall, and can be attractive for long term investors.
Important information
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